The federal government and energy company Asset Energy have agreed to end their legal battle over Mr Morrison's decision, by proposing consent orders to the court.
Asset Energy launched a legal challenge to the PEP-11 decision last year, saying Mr Morrison breached the requirements of procedural fairness and that he was not validly appointed as the responsible minister of the joint authority.
"What I won't do is do what the former government did, and essentially create a situation whereby legally, it wasn't tenable," Mr Albanese told reporters on Saturday in Sydney.
"This situation has arisen because of the incompetence and the dishonesty of the Morrison government".
Mr Morrison used additional powers he had gained by swearing himself in as resources minister to intervene in the PEP-11 decision and veto it in 2021.
"No one was told that Scott Morrison was sworn in as the resources minister, in order to override Keith Pitt as resources minister. That's how we got into this debacle where the company has made legal action against the federal government," the PM said.
Petroleum Exploration Permit 11, known as PEP-11, is a petroleum well off the NSW coast between Wollongong and Newcastle, covering about 8,200 square kilometres.
If the court accepts the orders, Mr Morrison's decision would be overturned and put back to the Commonwealth-NSW Offshore Petroleum Joint Authority for consideration, the federal government said on Friday.
The federal and NSW state governments are both members of the decision-making authority.
The NSW government has also come out strongly against the extension.
"The NSW Liberal and Nationals government opposed the extension of PEP-11 in 2022, and although a decision has yet to be made by the Federal Court of Australia, I reaffirm our opposition as we have done over a number of years," Premier Dominic Perrottet said in a late Friday statement.
